Share This Story!

Feinberg announces how GM switch victims will be paid

Victims of General Motors faulty ignition switches can get as little as a few thousand dollars, or more than $10 million, based solely on the judgement of compensation fund administrator Kenneth Feinberg, hired by GM to run the payouts.

WASHINGTON — Victims of General Motors' faulty ignition switch could get as little as a few thousand dollars, or as much as millions of dollars, according to Kenneth Feinberg, who detailed on Monday the GM fund he'll oversee to compensate for deaths and injuries.

Feinberg, a lawyer specializing in dispute resolution and hired by GM, laid out how the program will work and who will be eligible at a press conference at the National Press Club.

"Money is a pretty poor substitute for loss. ... It's the best we can do," Feinberg said in an interview with USA TODAY.

"It was harder than I thought to hear Amber reduced to a dollar figure," said Laura Christian of Harwood, Md., who attended the Feinberg briefing. Her daughter, Amber Rose, died in a crash on July 29, 2005, when she was 16, and is one of the earliest fatalities linked to defective GM ignition switches.

Feinberg said the compensation fund will accept applications Aug. 1 through Dec. 31, and he forecasts its work will be done by the middle of next year. He said he will determine payment amounts using a modified version of the U.S. Bureau of Labor Statistics calculations of the economic loss in human tragedy.

Feinberg said there is no limit on the amount he can award for individual claims, nor on the total amount of GM's money he can spend. And Feinberg has the last word. "GM delegated to me full and sole discretion to decide which claims are eligible, and how much money they should get. There are no appeals (by GM or victims)," he said.

People who accept compensation agree not to sue GM.

In February and March, GM recalled 2.6 million 2003-2011 GM small cars worldwide, 2.19 million of those in the U.S. Only incidents involving these vehicles are covered by the fund.

The recalls are to replace defective ignition switches that the automaker links to 13 deaths in 54 crashes. The switch can inadvertently rotate from the "run" position to "accessory," shutting off the engine and, most dangerous, disabling the air bags.

If there was a crash but the air bags inflated, "You're not eligible," Feinberg said. "But ... if the air bag didn't deploy, or you don't know if the air bag deployed, file a claim."

But Feinberg emphasized that every occupant of the recalled GM cars involved in a crash can file a claim, regardless of where the the person was sitting (most of these cars have only front air bags). Pedestrians and occupants of other vehicles involved in wrecks with the recalled cars also can file.

That will boost the total death claims well beyond GM's 13 linked to the recall. That includes only front-seat occupants in frontal crashes where the air bags should have deployed and did not — the specific recall defect — and excludes side crashes and other impacts where the cars' air bags would not have deployed. The compensation plan won't make that distinction.

GM expects about 90% of claims to be settled through the fund.

GM deliberately stayed away from Feinberg's briefing, to emphasize his independence. But it said in a statement that it is "pleased that Mr. Feinberg has completed the next step with our ignition-switch compensation program to help victims and their families. We are taking responsibility for what has happened by treating them with compassion, decency and fairness."

The only other no-limit, sole-discretion fund run by Feinberg was the one for victims of the 9/11 terrorist attacks. He said that one paid out $7.1 billion in taxpayers' money and that 97% of 3,077 claims were settled by the fund. The rest chose to seek better deals in court.

Beyond the value-of-life tables, Feinberg says special circumstances will figure into final compensation. One case he's expecting involves a driver whose GM car crashed, killing her boyfriend, who was a passenger. She was fined for felony reckless driving. "For 10 years, she's been living with the idea that she recklessly killed her boyfriend. I find that's a rather extraordinary circumstance," and should be evaluated outside the fund's formula.

What will be ignored is carelessness, intoxication or other "contributory negligence" by the driver or passengers, Feinberg said. "Intoxication, speeding, texting with your cellphone — irrelevant. This fund will not look in any way, shape or form at the negligence."

People who've already settled claims with GM, before the switch recall, can seek more money, he said. If they qualify, the award to them will be reduced by the amount already paid.

Feinberg has set up what he calls a "menu" of ways people can provide evidence the switch caused their crash. It needn't be "absolutely, positively, but more probable than not that the ignition switch failed," he said.

Once the fund closes, Feinberg said, he will provide "a full reckoning, an audit for the public. What claims were approved, what ones denied, and why."

Feinberg said he will meet, at their request, with any victims or families whose claims involved deaths or catastrophic injuries.

He's learned from previous fund cases that, "these people do not come to see me to talk about money. They want to vent: 'Why my daughter, Mr. Feinberg?' Unless you have a heart of stone, it's really difficult. It's very stressful, but necessary.

"A law degree in a problem like this is probably irrelevant. A divinity degree, maybe."